Euro zone bond yields rise, but euro falls as ECB Draghi speaks

Reuters Staff

2 Min Read

LONDON, July 26 (Reuters) - Euro zone government bond yields rose on Thursday after European Central Bank president Mario Draghi said uncertainty around the inflation outlook was receding, and that underlying inflation was set to pick-up towards year-end.

But the euro, after inching higher to trade flat on the day, eased back into negative territory after Draghi reaffirmed the bank’s commitment to keep rates on hold through the summer of 2019.

The single currency was last down 0.3 percent at $1.1696.

Draghi also pledged to wrap up the bank’s bond-buying programme by year-end and saw euro-area economic growth remaining “solid and broad-based.”

Germany’s 10-year government bond, the benchmark for the bloc, hit the day’s high at 0.424 percent, and on par with a six-week high hit earlier this week.. Other euro zone bond yields also inched higher, up around 3 basis points on the day.

European stocks extended their gains after Draghi spoke and were last trading 0.7 percent higher. (Reporting by London markets team; Writing by Sujata Rao; Editing by Dhara Ranasinghe)